inversecondemnation.com

Seventh Circuit: Threat Of Eminent Domain No "Sword Of Damocles," So Declaratory Judgment Suit Premature

We all live under the threat the government may exercise eminent domain and take our property, and must live with that cloud, unless the threat becomes more concrete. Only then can we run to court to complain about it. While the U.S. Court of Appeals for the Seventh Circuit didn't expressly hold so, that idea underlay its decision in Rock Energy Cooperative v. Village of Rockton, No. 10-1106 (Aug. 10, 2010) (sounds like something out of "The Flintstones," no?).

In that case, Rock Energy sought a declaratory judgment from the federal district court that the Village does not have the authority to purchase or condemn its property. We leave the details for you to review, but here is the most interesting part of the decision in our view:

We begin with Rock Energy’s eminent-domain theory. The company would like us to believe that its Alliant assets are likely to be taken by the Village at any moment. As we held in Shannon, it continues, it is "no bar to ripeness if the government has only threatened enforcement, rather than actually brought a lawsuit." 539 F.3d at 760. But this record is startlingly devoid of evidence that the Village is waiting to pounce with an eminent domain action. The ordinance about which Rock Energy complains was passed five years ago; Rock Energy has had a contractual right to own the assets for the same five years; and it has actually held them for more than three years. That does not sound like imminence to us. What Rock Energy does not like is living, as it might put it, under the Sword of Damocles, knowing that its property rights can be cut off by the Village’s eminent domain power at any moment

This case does not look like some of the other Illinois cases on which Rock Energy relies, where the unrealized threat of eminent domain was well on the road to fulfillment. For example, in Davis v. Brown, 827 N.E.2d 508 (Ill. App. Ct. 2005), the state authorities had an elaborate plan in place to take the plaintiffs’ property, and the ordinance in question restricted their use of the property during the lead-up to the taking. Id. at 511-13. In Philip v. Daley, 790 N.E.2d 961 (Ill. App. Ct. 2003), the city was in the midst of executing a detailed plan to take the plaintiffs’ property. Id. at 963-64. As far as this record shows, during the years since the ordinance was passed, the Village has done nothing other than write a letter or two indicating that condemnation was on the table.

Slip op. at 7-8.

Minn Supremes: Property Can Be Taken To "Reawaken The Spirit And Vitality" Of City Without Statutory Development Agreement In Place

This just in: the Minnesota Supreme Court has issued an opinion in a case we've been watching, Eagan Economic Development Authority v. U-Haul Co. of Minnesota, No. A08-767 (July 29, 2010). This is the case in which the Court of Appeals invalidated a quick-take because the redevelopment authority -- which attempted to take property to "reawaken the spirit and vitality of [that] part of Eagan" (and, less soul-stirringly, to "replac[e] a market obsolete regional shopping center") -- could not condemn property without first having a binding development agreement in place. 

The Supreme Court reversed. The court held:

The Eagan Economic Development Authority is bound by the prohibitions and requirements of the "Redevelopment Plan for the Establishment of the Cedar Grove Redevelopment Project Area" it prepared, adopted, and submitted to the Eagan City Council for approval, which approval was granted.

Subsection 1-8 of the "Redevelopment Plan for the Establishment of the Cedar Grove Redevelopment Project Area," which deals with the proposed reuse of property, does not require the Eagan Economic Development Authority to have a binding development agreement before it can condemn private property in this circumstance.

More, after we've had a chance to digest the opinion. Our summary of the court of appeals' opinion is here.

Updated Opinion: Impact Fee Not Reasonably Related To Burden Created By Development

Last month, we summarized Homebuilders Ass'n Tulare/Kings Counties, Inc. v. City of Lemoore, No. F057671 (Cal. Ct. App. June 9, 2010), a case about the propriety of impact fees under California's Mitigation Fee Act (Cal. Gov't Code § 66000, et seq.). The court upheld most of the impact fees as reasonably related, but invalidated fire mitigation fees imposed on development in one part of town where fire facilities were adequate would be used to offset the cost of already-built fire facilities in another part of town. The standards for impact fees under the Act are similar to the constitutional Nollan/Dolan standards, and the court concluded the impact fee violated the statute because it was not reasonably related to the burden created by a development. Read our complete summary here.

Today, the court revised the opinion (but did not change the judgment). In this order, the court deleted "the entire discussion under part 2, 'The standard of review and burden of proof'" (page 4), and replaced it with a new section. It looks like some technical tweaks to the court's recitation of the burden of proof.

Friday's Columbia "Blight" Case (Kaur) Links

Here's a round-up of reports and analysis of yesterday's opinion by the New York Court of Appeals in the "Columbia U. blight" case, Kaur v. New York State Urban Development Corp., No. 125:

• "Judicial review of eminent domain in New York is fundamentally broken" - Damon W. Root (Reason blog)

• Court of Appeals, citing precedent in Atlantic Yards case, overturns lower court ruling blocking eminent domain for Columbia expansion - Norman Oder (Atlantic Yards Report)

• New York Court of Appeals Backs Eminent Domain Use in Columbia Expansion (WSJ Law Blog)

• New York High Court Upholds Columbia University Takings - Ilya Somin (The Volokh Conspiracy)

• NY Court of Appeals decides Columbia U. Eminent Domain case - Matthew Festa (Land Use Prof Blog)

• N.Y. Court of Appeals Reverses Appellate Division and Says Columbia University Condemnation May Proceed (New York Zoning and Municipal Law Blog)

• Universities and Eminent Domain - Ilya Somin (The Volokh Conspiracy)

• New York's Eminent Domain "Blight" Grows - Jonathan Tobin (Contentions)

• Columbia Expansion Backed by New York's Top Court (Bloomberg)

New York Still Has "Unfrozen Caveman Judges" Who Are "Frightened And Confused" By Eminent Domain Blight

More on today's opinion in the "Columbia U. blight" case, Kaur v. New York State Urban Development Corp., No. 125.

As we noted in our critique of the Atlantic Yards case (Goldstein), New York judges apparently are too "frightened and confused" by allegations that property is not truly "substandard or unsanitary," so must defer to the agency's finding:

The term "substandard or insanitary area" is defined as "a slum, blighted,  deteriorated or deteriorating area, or an area which has a blighting influence on  the surrounding area" (Uncons Laws § 6253 [12]). Here, the two reports prepared by ESDC consultants -- consisting of a voluminous compilation of documents and photographs of property conditions -- arrive at the conclusion that the area of the Project site is blighted. Just as in Matter of Goldstein, "all that is at issue is a reasonable difference of opinion as to whether the area in question is in fact substandard and insanitary," which is "not a sufficient predicate . . . to supplant [ESDC's] determination" (13 NY3d at 528).

Thus, given our precedent, the de novo review of the record undertaken by the plurality of the Appellate Division was improper.

Slip op. at 18. In other words, "blight" is whatever the agency says it is. Just drum up a "study" or two, and you're insulated from judicial review.

On top of that, the court included benefit to a private educational institution as a "civic purpose" that is also insulated from judicial review, and used the Atlantic Yards project as the examplar:

Moreover, consonant with the policy articulated in the UDC Act, ESDC has a history of participation in civic projects involving private entities. The most recent example of a civic project is the Atlantic Yards project, which authorized a private entity to construct and operate an arena for the Netsprofessional basketball franchise (see Matter of Develop Don't Destroy (Brooklyn) v Urban Dev. Corp., 59 AD3d 312 [1st Dept 2009], lv denied 13 NY3d 713 [2009]). The petitioners in that case argued that the project did not qualify as a "civic project" because the arena would be used by a professional basketball team and operated by a private profit-making entity. In rejecting that argument, the Appellate Division explained, "that a sports arena, even one privately operated for profit, may serve a public purpose" (id. at 325). Looking to the plain language of the UDC Act (see Uncons Laws § 6260 [d]), the court observed that "the proposed arena will serve a public purpose by providing a needed recreational venue in the area of the project" (id.).

The proposed Project here is at least as compelling in its civic dimension as the private development in Matter of Develop Don't Destroy (Brooklyn). Unlike the Nets basketball franchise, Columbia University, though private, operates as a non-profit educational corporation. Thus, the concern that a private enterprise will be profiting through eminent domain is not present.

Slip op. at 24-25. At least New Yorkers love their schools as much as their sports.

There Really Are No Limits To Eminent Domain In New York - Court Of Appeals Reverses The Columbia Case (Kaur)

The New York Court of Appeals today reversed the Columbia "blight" case, Kaur v. New York State Urban Development Corp., No. 125 (June 24, 2010). The unanimous opinion came swiftly (oral arguments were just under a month ago), suggesting it was not a close call for the court. Here's the Appellate Division's opinion.

We haven't had time to digest it, and there certainly will be a round of analysis and opinion on the case, but here's the introductory paragraph of the court's opinion:

In this appeal, we are called upon to determine whether respondent's exercise of its power of eminent domain to acquire petitioners' property for the development of a new Columbia University campus was supported by a sufficient public use, benefit or purpose (see New York Const art I, § 7 [a]; Eminent Domain Procedure Law 207 [C] [4]). We answer this question in the affirmative and conclude, pursuant to our recent holding in Matter of Goldstein v New York State Urban Dev. Corp. (13 NY3d 511 [2009]), that the Empire State Development Corporation's ("ESDC") findings of blight and determination that the condemnation of petitioners' property qualified as a "land use improvement project" were rationally based and entitled to deference. We also conclude that the alternative finding of "civic purpose," likewise, had a rational basis.

Slip op. at 1-2.

The court's recent opinion in the Atlantic Yards case (Goldstein) was always going to be this case's biggest hurdle. But Kaur's posture and the developed record were thought to perhaps distinguish it from Goldstein. Not so.

You've got to wonder whether there are any limits on eminent domain in New York. Today, it looks like there are not.

Impact Fee Not Reasonably Related To Burden Created By Development

Most of the time when we think of impact fees and other development exactions, Nollan and Dolan spring immediately to mind. In those two cases, the Court established the requirement that exactions have a reasonable relationship ("nexus") to some ill caused by a proposed development, and be "roughly proportional" to the impact created by the development.

Absent a nexus and proportionality, an exaction is "not a valid regulation of land use but 'an out-and-out plan of extortion.'" Nollan v. California Coastal Comm’n, 483 U.S. 825 (1987) (citations omitted). The Court was worried that absent a nexus and proportionality, impact fees, in-lieu fees, and development exactions were a form of "pay to play" where local governments take advantage of the fact that a property owner seeks development approvals, to leverage land other property or cash to address impacts not caused by the property owner.

However, Nollan/Dolan is not the only context in which these issues arise. In Homebuilders Ass'n Tulare/Kings Counties, Inc. v. City of Lemoore, No. F057671 (Cal. Ct. App. June 9, 2010), for example, the court invalidated an impact fee under California's Mitigation Fee Act (Cal. Gov't Code § 66000, et seq.) because fees imposed on development in one part of town where fire facilities were adequate would be used to offset the cost of already-built fire facilities in another part of town. The standards for impact fees under the Act are similar to the constitutional Nollan/Dolan standards, and the court concluded the impact fee violated the statute because it was not reasonably related to the burden created by a development.

Update (July 8, 2010): the court issued an amended opinion tweaking the standard of review section, but not changing the judgment.

In 2005, the City of Lemoore commissioned an impact fee study to support the imposition of various impact fees for such things as law enforcement, park land acquisition and improvement, refuse, fire protection, and community recreational facilities. The Homebuilders Association challenged the fees for a variety of reasons, but its petition was eventually whittled down to the Mitigation Fee Act and California's Quimby Act (Cal. Gov't Code § 66477), which limits the ways local governments can impose subdivision exactions. The trial court upheld all of the impact fees except the park land improvement fee, which it invalidated as preempted by the Quimby Act.

The court of appeal reversed the Quimby Act holding (see slip op. 10-14 if you are interested for the analysis of preemption) and upheld all of the other impact fees, except one part of the Fire Protection Impact Fee, which it invalidated under the Mitigation Fee Act:

For purposes of calculating fire protection impact fees, the Colgan Report divided the City into two service areas, the older established east side and the newer west side. Regarding the east side, the Colgan Report states that "the facilities and equipment needed to serve future development are already in place, so impact fees for that area are intended to recover new development's proportionate share of the cost of the fire protection assets serving the area. The revenue from those fees will be used to offset a portion of the City's recent investments in facility improvements and new equipment, which were funded in part with general fund money." In contrast, the west side will need a new fire station and equipment to serve that area as it develops.

....

As discussed above, the Mitigation Fee Act requires the local agency to determine that the amount of the fee and the need for the public facility are reasonably related to the burden created by the development project. Further, the local agency must identify the facilities to be financed by the fee.

HBA objects to the east side fees on the ground that they are being imposed for general revenue purposes. Since there is no need for additional fire protection facilities in that part of the City to serve new development, HBA contends that no nexus exists between the fees and the burden posed by new housing.

HBA is correct. While a fee may be imposed to cover costs attributable to increased demand for public facilities reasonably related to the development project in order to (1) refurbish existing facilities to maintain the existing level of service or (2) achieve an adopted level of service that is consistent with the general plan (§ 66001, subd. (g)), the existing east side fire protection facilities are already adequate to continue to provide the same level of service. In other words, the new development will not burden the current facilities. The Colgan Report's proposal to reimburse the City for its prior general fund money investments is not authorized by the Mitigation Fee Act. Rather, such a fee would constitute general revenue to the City in violation of section 66008, and therefore is invalid.

Slip op. at 18-19.

However, the court upheld the fire protection fee for developments on the other side of town: 

The Colgan Report concludes that, due to the barrier created by Highway 41 between the east side and the west side of the City, a new fire station will be required to serve the west side as it develops. In calculating the cost per capita for the west side, Colgan included the forecasted population of a 476 acre area that may be annexed to the City in the future. This addition resulted in reducing the west side fire protection impact fees by approximately 28 percent.

HBA objects to the calculation including this potential annexation area as opposed to using the existing legal boundaries of the City. HBA posits that a new fire station might not be needed if the hypothetical annexation does not occur.

Contrary to HBA's position, the Colgan Report provides a reasonable basis for the City's adoption of the west side impact fee. There is no indication that, without the potential annexation, additional fire protection facilities would be unnecessary to serve new development. Rather, it can be inferred from the relatively low percentage of fee reduction, i.e., 28 percent, that fire protection facilities would be required with or without the annexation. The City considered the potential population to be served for the purpose of reducing the fee that would otherwise be charged and spreading the costs more equitably. This action was not arbitrary or capricious.

Slip op. at 19.

This case is worth a read even for non-California practitioners. Even though this opinion deals with the Mitigation Fee Act, the court's handling of Nollan/Dolan-like standards is instructive for anyone who deals with impact fees and exactions.

Video Of Columbia Blight Case Oral Arguments (NY Court Of Appeals)

Launch in external player

Missed our live blog of the the New York Court of appeals oral arguments in Kaur v. New York State Urban Development Corp. the case in which the Appellate Division struck down an attempt to take property north of Columbia University in New York City because of the record reflected overwhelming private benefit and lack of "blight?"

Well, you're in luck -- the court has archived the video.

Launch the live blog and start the video at the same time and you can follow along with Timothy Sandefur, Mark Murakami, and me as we provide commentary.

To launch the video in a separate window, go here.

Norman Oder has posted an excellent summary of the arguments on Atlantic Yards Report. Worth reading, especially as you follow along with the video.

Columbia Oral Argument Recap - Blight, Civic Purpose, And Bad Faith

We've been busy filing an appellate brief and drafting another, so until now, haven't had the chance to post up links about Tuesday's New York Court of Appeals oral argument in Kaur v. New York State Urban Development Corp.

We live blogged the arguments, following along on the court's video webcast. The court usually posts an archived video of oral arguments, which we expect next week.

Until then, check these out:

• New York High Court Oral Argument in Columbia Eminent Domain Case - lawprof Ilya Somin, via Volokh Conspiracy

• Columbia eminent domain case draws heated arguments, frequent references to Atlantic Yards - Norman Oder via his indispensable blog Atlantic Yards Reports

• Court of Appeals state on M'ville blight, civic purpose of expansion - the Columbia Spectator's summary

Any predictions? The only thing we're going to predict publicly is that the opinion should be issued by the end of the summer - the Court of Appeals usually hands out opinions pretty quickly.

As background to the arguments, you may also want to check these reports out:

• Legal briefs shed light on eminent domain argument - Columbia Spectator

• After long battle, eminent domain to be scrutinized in highest state court - Columbia Spectator

• Columbia eminent domain appeal today in Albany; Atlantic Yards decision invoked regularly; will Court of Appeals revise NY's role as national outlier? - Atlantic Yards Report

• Court date set for Columbia eminent domain case - Crain's New York Business

• The Blight Stops Here - Damon Root, via reason.com

2pm ET Today: Live Blog Of Columbia Eminent Domain Arguments (NY Court Of Appeals)

Today, starting at 2:00 p.m. ET, the New York Court of Appeals will hear oral arguments in Kaur v. New York State Urban Development Corp. In that case, the New York Supreme Court, Appellate Division (First Department) struck down the attempted taking of land north of Columbia University in New York City because of the record reflected overwhelming private benefit and lack of "blight." We analyzed the Appellate Division's opinion here.

The Court of Appeals webcasts oral arguments, so we will be able to follow along and live blog the event in the window below. Joining me will be eminent domain scholar and property owners' advocate Tim Sandefur, and my Damon Key colleague and fellow condemnation law attorney Mark Murakami.

The briefs are posted below the live blog window.

Here are the briefs in the Court of Appeals:

• Brief for the New York State Urban Development Corporation d/b/a Empire State Development Corporation

• Brief for the Petitioners-Respondents (the property owners)

• Brief amicus curiae of NY State Senator Bill Perkins (Sen. Perkins represents Harlem, the Upper West Side, and Washington Heights)

Reminder: June 1 NY Court Of Appeals Oral Agument In Columbia "Blight" Case

A reminder: on Tuesday, June 1, 2010 at 2:00 p.m. ET, we will be live blogging the oral arguments in Kaur v. New York State Urban Development Corp.

In that case, the New York Supreme Court, Appellate Division (First Department) struck down the attempted taking of land north of Columbia University in New York City because of the record reflected overwhelming private benefit and lack of "blight." The agency appealed to the Court of Appeals.

The Court of Appeals webcasts oral arguments, so we will be able to follow along and live blog the event. Joining me will be eminent domain scholar and property owners' advocate Tim Sandefur, and my Damon Key colleague and fellow condemnation law attorney Mark Murakami. Sign up here for email notification, then on Tuesday, follow along and join in the discussion.

Here are the briefs in the Court of Appeals:

• Brief for the New York State Urban Development Corporation d/b/a Empire State Development Corporation

• Brief for the Petitioners-Respondents (the property owners)

• Brief amicus curiae of NY State Senator Bill Perkins (Sen. Perkins represents Harlem, the Upper West Side, and Washington Heights)

Final Briefs In Hawaii Eminent Domain Abuse Cases: Pretext, Actual Purposes, And Private Benefit

Today, we filed the final briefs in the latest phase of County of Hawaii v. C&J Coupe Family Ltd. P'ship, two condemnation appeals presently before the Hawaii Supreme Court arising out of the County's attempts to take a Kona family's property.

We filed this brief replying to the developer's Answering Brief, and this brief in reply to the County of Hawaii's Answering Brief.

The Opening Brief which we filed in November 2009 is posted here.

These cases have resulted in two prior reported opinions, County of Hawaii v. C & J Coupe Family Ltd. P’ship, 119 Haw. 352, 198 P.3d 615 (2008) (available here), which deals with the issue of pretext and public purpose in eminent domain, and County of Hawaii v. C & J Coupe Family Ltd. P’ship, 120 Haw. 400, 208 P.3d 713 (2009) (available here), which held that under Hawaii law, the condemnor must pay 100% of the property owners damages if a taking is dismissed or otherwise fails.

More about the cases here.

ALI-ABA Annual Eminent Domain Conference Wrap-Up

We just wrapped up the annual three-day Festival of Eminent Domain Law, otherwise known as the American Law Institute | American Bar Association's two CLE conferences, "Eminent Domain and Land Valuation Litigation," and "Condemnation 101: How To Prepare and Present an Eminent Domain Case." 

Dana Berliner, Matt Fellerhoff and I spoke about about "Winning Arguments in Challenging the Right to Take and Public Use" in the Land Valuation course, and in the 101 course, I presented a session on "Voir Dire: Selecting a Jury in a Post-Kelo Era in a Down Economy" with William Blake and Susan MacPherson.

The depth of talent teaching and attending these courses is unbelievable, so I always learn more at these conferences than I impart. Among the other presenters were our fellow law bloggers Gideon Kanner, Anthony Della Pelle and Edward McKirdy. Internet marketing strategist Jayne Navarre also presented an interesting session on using social media and other internet tools to help build an eminent domain practice. Many of my Owners Counsel of America colleagues were also on the faculty.

And finally, a shout out to the Planning Chairs for these events -- Leslie Fields and Joe Waldo, and Andrew Brigham and Jack Sperber -- for inviting me to make the presentations.

Getting The "Goodies" And Honolulu's $100 Million Golf Course Exaction

On Wednesday, Honolulu lost its iconic former Mayor, Frank Fasi. Mayor Fasi will be remembered for a lot of things, but we here at inversecondemnation.com will fondly recall his cheek when it came to exactions and in lieu payments. Two of the more well known examples:

• During the second wave of investment in Hawaii from Japan, he announced that any golf course developer who wished to obtain permits from the City and County of Honolulu would have to pay a $100 million impact fee. We're not sure whether anyone ever paid the fee, and we're pretty sure that even in the days before Nollan and Dolan that a court would cast a skeptical eye towards it, but sometimes you just have to admire the pure audacity of something.

• In a case involving Queen's Beach on Oahu's east shore, the director of Mayor Fasi's Department of Land Utilization testified that the City wanted to get "the goodies" from the developer of a proposed resort as a condition of allowing the development. By "the goodies," he meant the most valuable portion of the beachfront parcel, the part along the beach, which would have to be dedicated to the public before any permits would issue. The developer challenged the exaction in federal court, but  lost. This was pre-Nollan/Dolan. We represented the developer in its unsuccessful cert petition to the U.S. Supreme Court (we were ahead of our time!).

Those were the days, Mr. Mayor.

Developer's Brief In Hawaii Eminent Domain Abuse Case: Pretext, Actual Purposes, And Private Benefit

The developer in the two condemnation cases arising out of the County of Hawaii's attempts to take a Kona family's property has filed its Answering Brief in the latest phase of County of Hawaii v. C&J Coupe Family Ltd. P'ship.

We posted the County's Answering Brief here.

We represent the property owner in these appeals, and the brief we filed in November 2009 is posted here. More about the cases here.

Government's Brief In Hawaii Eminent Domain Abuse Case: Pretext, Actual Purposes, And Private Benefit

The County of Hawaii has filed its Answering Brief in the latest phase of County of Hawaii v. C&J Coupe Family Ltd. P'ship, two condemnation cases arising out of the County's attempts to take a Kona family's property. The brief responds to the Opening Brief which my Damon Key colleagues Ken Kupchak, Mark Murakami, Matt Evans and I filed in November 2009 (available here).

This appeal addresses several issues, but the most critical involve pretext and public purpose, questions left open by the U.S. Supreme Court in Kelo v. City of New London, 545 U.S. 469 (2005), but which were answered, in part, by the Hawaii Supreme Court in its opinion when these cases were first before the court last year. See County of Hawaii v. C&J Coupe Family Ltd. P'ship, 119 Haw. 352, 198 P.3d 615 (2008) (available here)

In that opinion, the court held that a property owner has a right to challenge the government's assertion that a taking is for public use. In reviewing a taking, courts have an obligation to take seriously a property owner's claim that the government's stated public purpose is a pretext masking its true purposes. The court held that substance matters, not form, when government adopts a resolution of taking. Id. at 383, 198 P.3d at 646. The court held that the trial court erroneously accepted the County’s stated purpose at "face value," and the "single fact that a project is a road does not per se make it a public road." Id. at 381, 198 P.3d at 643 (emphasis original).

The court vacated the trial court’s approval of the taking, and remanded the case with instructions to “thoroughly consider” evidence of pretext and private benefit by examining the County’s "actual purposes," its "veracity," and by "look[ing] behind the government’s stated public purpose" with a "closer objective scrutiny of the justification being offered." Id. at 375, 198 P.3d at 638 (“[O]ur case law supports the proposition that a court can look behind the government’s stated public purpose.”).

After the remand from the Hawaii Supreme Court, the trial court again validated the taking, concluding there was "no evidence"of pretext or private benefit, and the case returned to the appellate courts. The Hawaii Supreme Court has transferred the case from the Intermediate Court of Appeals.

More about the cases here.

The Latest On Eminent Domain In New York From The NY Times

The New York Times' "Square Feet" column today posted "Lessons on Limits of Eminent Domain at Columbia," about the recent decision in Kaur v. New York State Urban Dev. Corp., 2009 NY Slip Op 08976 (Dec. 3, 2009). In that case, the New York Supreme Court, Appellate Division (First Department) struck down the attempted taking of land north of Columbia University in New York City because of the record reflected the condemnor's claim the properties are "blighted" was a pretext to mask overwhelming private benefit. The Kaur court undertook an extensive review of the facts and concluded "there is no independent credible proof of blight in Manhattanville."

The article notes:

The Dec. 3 opinion by the New York Supreme Court's appellate division, which found there was no civic or public purpose or blight to justify condemning Tuck-It-Away's buildings for the university's new campus, has unnerved public officials and developers. The Columbia decision "is the first thing that's happened in New York that suggests the threat of a change in our eminent domain law," said Kathryn S. Wylde, chief executive of the Partnership for New York City, a leading business group. "I think it’s frightening because there are few more important investments in our city’s future than that which Columbia is making."

The article also has a choice comment from our Owners' Counsel of America colleague Mike Rikon:

"I think people are really getting a foul smell from what’s been going on" said Michael Rikon, a lawyer who represents business owners in the Willets Point section of Queens, where the city intends to condemn property to make way for a large redevelopment project.

The piece also quotes our ABA State and Local Government Law Section colleague Amy Lavine (who, by the way, produces a very good law blog on community benefit agreements):

A provision to require trial-level review could be part of new legislation being drafted by Mr. Perkins, said Amy Lavine, a staff attorney with Albany Law School’s Government Law Center, who is advising the state senator. At the top of her list is substituting a specific definition of blight for the current standard of "substandard and insanitary" One model might be Pennsylvania's 2006 law, which permits a blight finding only when a substantial number of properties meet certain conditions such as being “unfit for public habitation” or having been tax delinquent for two years. "It's about making sure there are objective standards relating to public health and safety," Ms. Lavine said.

Ms. Lavine said she also supported lengthening the 30-day time limit for mounting a condemnation challenge.

The complete article is available here.

"At the start of this project, my company announced that it would try to avoid the use of eminent domain"

This probably isn't the phrasing you should use if you are trying to convince others that you are not a "politically connected developer" who got the government to exercise eminent domain on your behalf.

"Atlantic Yards project was not properly presented," complains Charles Ratner, the president of Forest City Enterprises in this letter to the editor of the Washington Post, which objects to George Will's recent column about the proposed Atlantic Yards project in Brooklyn.

Looks like Mr. Will got it right.

Minnesota Supreme Court Hearing Eminent Domain Delegation Appeal

The Minnesota Supreme Court today heard oral arguments in Eagan Economic Development Authority v. U-Haul Company of Minnesota. The case asks from where a redevelopment authority derives its eminent domain power. We digested the court of appeals' decision here.

Update: a report on the argument is posted here.

Here's the summary of the issues presented from the Minnesota Courts site:

In 2001, the city established Cedar Grove as a tax increment financing district and adopted a redevelopment plan for the district. That redevelopment plan provided that before formal consideration of the acquisition of any property, the city would require a binding development agreement. In 2007, after negotiations to purchase the properties stalled, appellant Eagan Economic Development Authority took the properties by eminent domain. The district court granted the condemnation petitions; the court of appeals reversed, concluding that the economic development authority exceeded the scope of its condemnation authority by attempting to condemn the properties without a binding development agreement in place. Four issues are before the supreme court: (1) whether an economic development authority derives its eminent domain power from a city or from a statute; (2) whether the court of appeals erred by applying to the Eagan Economic Development Authority, Minn. Stat. § 469.094, subd. 2 (2008), which provides that an economic development authority may exercise "all of the powers that the governmental unit establishing the project could exercise with respect to the project"; (3) whether a city can modify the resolution establishing an economic development authority without complying with Minn. Stat. § 469.092 (2008), which requires written resolution after notice and a public hearing; and (4) whether the particular redevelopment plan for Cedar Grove limited the authority’s power of eminent domain with respect to the project. (Dakota County)

More to follow when the court issues an opinion.

HAWSCT To Hear Pretext And Private Benefit Appeal

Today, the Hawaii Supreme Court filed this Order Granting and Accepting Application for Transfer (Dec. 21, 2009), in County of Hawaii v. C&J Coupe Family Ltd. P'ship, transferring the appeal from the Intermediate Court of Appeals. [Disclosure: my Damon Key colleagues and I represent the property owners in this case.]

This is the property owners' appeal of the County of Hawaii's attempts to take a Kona family's property. The first round of appeals resulted in County of Hawaii v. C&J Coupe Family Ltd. P'ship, 119 Haw. 352, 198 P.3d 615 (2008) (available here), which held that a property owner has a right to challenge the government's assertion that a taking is for public use. In reviewing a taking, courts have an obligation to take seriously a property owner's claim that the government's stated public purpose is a pretext masking its true purposes. The court held that substance matters, not form, when government adopts a resolution of taking. Id. at 383, 198 P.3d at 646.

The court held the trial court erroneously accepted the County’s stated purpose at "face value," and the "single fact that a project is a road does not per se make it a public road." Id. at 381, 198 P.3d at 643 (emphasis original). The court vacated the trial court’s approval of the taking, and remanded the case with instructions to "thoroughly consider" evidence of pretext and private benefit by examining the County’s "actual purposes," its "veracity," and by "look[ing] behind the government’s stated public purpose" with a "closer objective scrutiny of the justification being offered." Id. at 375, 198 P.3d at 638 (“[O]ur case law supports the proposition that a court can look behind the government’s stated public purpose.”).

After the remand from the Hawaii Supreme Court, the trial court again validated the taking, concluding there was "no evidence"of pretext or private benefit. This appeal challenges that ruling. The Opening Brief which we filed last month is available here.

John Stossel On Eminent Domain

Long, but worth watching. Features some well known players in the eminent domain scene.

New Article: Recent Developments in Public Use and Pretext in Eminent Domain

Each summer, The Urban Lawyer (the ABA's Section of State and Local Government Law's peer-reviewed law review), devotes an issue to recent developments in various areas of law. A subscription to the journal, which is published each quarter, is among the benefits of section membership. The just-published Summer 2009 issue includes my article on recent developments in public use and pretext in eminent domain, which I have creatively titled Recent Developments in Public Use and Pretext in Eminent Domain (43 Urban Lawyer 563 (2009)).

If that's not descriptive enough, here's a summary of the article:

The Supreme Court’s controversial 5-4 decision in Kelo v. City of New London renewed both public and judicial interest in the contours of the public use requirement of the Fifth Amendment and its counterparts in state constitutions. Courts began to take a harder look at how the government’s claim that property is being condemned for a public use or purpose can be challenged by a landowner, and what degree of deference is owed by the courts to the  government's assertion. This article summarizes recent developments in public use and pretext litigation.

The decisions the article covers include the most significant cases handed down between 2007 and early 2009, and include County of Hawaii v. C&J Coupe Family Ltd. P'ship, 198 P.3d 615 (Haw. 2008); City of Stockton v. Marina Towers, L.L.C., 88 Cal. Rptr. 3d 909 (Cal. Ct. App. 2009); In re Condemnation by the Redev. Auth. of Lawrence County, 962 A.2d 1257 (Pa. Commw. Ct. 2008); Aspen Creek Estates, Ltd. v. Town of Brookhaven, 848 N.Y.S.2d 214 (N.Y. App. Div. 2007), aff'd, 2009 WL (N.Y. 2009); Middletown Township v. Lands of Stone, 939 A.2d 331 (Pa. 2007); and Goldstein v. Pataki, 516 F.3d 50 (2d Cir.), cert. denied, 128  S. Ct. 2964 (2008).

The article is available in pdf format here. If you'd like a hard copy reprint, send me an email.

The Summer 2009 issue also includes articles about recent developments in land use law, exactions and impact fees, RLUIPA, and other topics. If you are a member of the SLG Section look for it in the mail soon.

Atlantic Yards Oral Argument Media (And Other) Reports

Yesterday, the New York Court of Appeals heard oral arguments in the latest case involving the controversial Atlantic Yards project in Brooklyn. We blogged the arguments as we followed along on the live video feed (video archived here).

According to the court's web site, "[t]he Court normally decides cases within thirty to sixty days after the oral argument date," so we should be seeing the outcome relatively quickly.  

Here are selected reports on the arguments and the issues in the case:

• New York Times: High Court Hears Arguments in Atlantic Yards Case
  

• Atlantic Yards Report: At eminent domain oral argument, judges skeptical of both sides; court spends more time on process, low-rent housing issue than AY as sweetheart deal

• Associated Press: NYC owners: Arena land-taking is unconstitutional

• Reuters: NY top court begins key hearing on Brooklyn project
  

• New Jersey Eminent Domain Law blog: Atlantic Yards eminent domain oral argument at the New York Court of Appeals
  

• NY1: Atlantic Yards Case Goes Before Appeals Court (video report)

• Professor Gideon Kanner: Tomorrow - Big Day, or Same Old, Same Old?

• Kanner on the Courtesy Sandwich Shop case

• Wall Street Journal: Court Weighing Eminent Domain

• The Institute for Justice's report: Building Empires, Destroying Homes: Eminent Domain Abuse in New York
  

Video Of Atlantic Yards Oral Arguments

Launch in external player

Missed the live blog and video of the oral arguments in Goldstein v. New York State Urban Development Corp., the latest case involving the controversial Atlantic Yards development and Kelo-like claims of eminent domain abuse in an economic development taking? 

Well, you're in luck -- the court has archived the video.

Launch the live blog and start the video at the same time and you can follow along with Timothy Sandefur, Mark Murakami, and me as we provide commentary.

To launch the video in a separate window, go here.

Live Blog Of NY Court Of Appeals Atlantic Yards Eminent Domain Abuse Case Oral Arguments

On Wednesday October 14, we followed the arguments in Goldstein v. New York State Urban Development Corp., the latest case involving the controversial Brooklyn Yards development and Kelo-like claims of eminent domain abuse in an economic development taking.

Joining in the commentary were Pacific Legal Foundation attorney and property rights scholar Timothy Sandefur, and my Damon Key colleague and eminent domain litigator Mark Murakami.

For a first hand report from the courtroom, check out Dean Patty Salkin's comment.

Wednesday, October 14, 2009, 2 pm EDT: Live Blog Of NY Court Of Appeals Atlantic Yards Eminent Domain Abuse Case Oral Arguments

It appears that the New York Court of Appeals live streams oral arguments, so tomorrow, for the second day in a row, we'll go live with real-time blogging of an important and fascinating case (today we're blogging oral arguments in the Hawaii Supreme Court on a land use case).

Starting at 2 pm EDT on Wednesday October 14, we'll follow the arguments in Goldstein v. New York State Urban Development Corp., the latest case involving the controversial Brooklyn Yards development and Kelo-like claims of eminent domain abuse in an economic development taking.

Go to this page to check if the viewer window works in your browser, and to sign up for an email reminder as the date approaches. Or, you can just come back here on Wednesday when we go live at about 1:45 p.m. Eastern time. The live window will be the top post on the blog that day.

The merits and amicus briefs in the appeal are posted here.

This post at the Volokh Conspiracy has a good summary of the issues in the case, and why they are important. Dean Patty Salkin's summary of the case is posted on the Law of the Land Blog here. The court's Public Information Office's summary of the case:

This proceeding challenges the use of eminent domain by the Empire State Development Corporation (ESDC) to take property on the site of the proposed Atlantic Yards project in downtown Brooklyn for development by the Forest City Ratner Companies. The centerpiece of the 22-acre project is construction of an arena for the New Jersey Nets basketball team, owned by Forest City Ratner principal Bruce Ratner. Plans for subsequent stages of the project include construction of 16 towers for office and retail space, more than 5,000 housing units, and community facilities offering health and child care; and creation of eight acres of open space for public use. The New York State Urban Development Corporation, doing business as the ESDC, approved the use of its power of condemnation in December 2006, after determining the project would serve the public purposes of eliminating blight and providing recreational and community facilities, mass transit and infrastructure improvements, affordable housing, job creation, and increased tax revenue.

Petitioners, who live or own businesses on the Atlantic Yards site, initially challenged the taking of their properties in federal court, contending that the primary benefits of the project would accrue to Ratner and that the public purposes cited by ESDC were pretexts for a private taking. The federal action was dismissed for failure to state a viable claim that the condemnations violated the Fifth Amendment (see Goldstein v Pataki, 488 F Supp2d 254 [EDNY 2007], affd 516 F3d 50 [2d Cir 2008]).

Petitioners then commenced this action in August 2008 contending, among other things, that the New York Constitution sets a more restrictive standard for condemnation and that the taking of their properties would violate its Public Use clause (article I, § 7), which states that "private property shall not be taken for public use without just compensation."

The Appellate Division, Second Department upheld ESDC's determination to condemn private property for Atlantic Yards, rejecting the claim that the Public Use clause must be read literally to allow condemnation only where the property "is to be held open for use by all members of the public." It said New York courts "recognized quite early on that some takings, which would benefit private enterprises such as railroad companies, would also inure to the benefit of the public and thus constitute 'public use.'" It said "the literal interpretation of the concept of public use which the petitioners urge us to apply was abandoned long before the United States Supreme Court concluded [in Kelo v City of New London (545 US 469 [2005])] that the use of eminent domain to carry out an economic development plan does not violate the Fifth Amendment to the United States Constitution.."

Petitioners argue, in part, that a narrow interpretation of "public use" is "compelled by the plain meaning of the term, the intent of the New York citizens who first enacted the provision in 1821, and by a raft of decisions from this Court during the 19th and early 20th centuries -- a time considerably closer to its enactment than more modern cases that have been infected by the U.S. Supreme Court's aggressive attempts to render meaningless the comparable provision in the Fifth Amendment." They also argue the ESDC failed "to weigh the public benefit that will be realized by the seizure against the benefit that will accrue to the recipient of [the] property," as required under Aspen Creek Estates, Ltd. v Town of Brookhaven (12 NY3d 735).

Book Review: Little Pink House - A True Story of Defiance and Courage

Story behind court ruling resonates in isles

[This review was originally published in the Honolulu Star-Bulletin on September 20, 2009]

You remember that line in the Stevie Wonder classic -- "For once I can say this is mine, you can't take it"?

It turns out they can.

In 2005 in Kelo v. New London, the U.S. Supreme Court held the government can take a home and give it to a developer if the developer is projected to pay more taxes. Your property can be condemned if someone else may make "better" use of it than you do.

A new book, "Little Pink House: A True Story of Defiance and Courage," tells the story of Susette Kelo, the case's namesake who owned a little pink house in Connecticut taken by eminent domain. It's not a dry recounting of legal doctrines, but a fast-paced insider account explaining why property owners resist losing their land even in the face of overwhelming odds.

The book is of special interest to Hawaii readers. The U.S. Supreme Court majority relied on the 1984 case about Hawaii's Land Reform Act, which upheld the use of eminent domain by homeowners to take their leased fees. Also, the Hawaii Supreme Court last December ruled that local property owners are entitled to more legal protections than Susette Kelo.

Kelo had a tough background -- an impoverished childhood, five children by age 25 and two failed marriages -- and she seemed to pour all her aspirations into her modest home, which she refurbished herself and repainted its original pink.

No sooner had she settled in, however, than the New London Development Corporation came knocking. The NLDC wanted her entire neighborhood for a five-star hotel site, part of a package to entice a major pharmaceutical company to relocate to New London. She refused to believe the Fifth Amendment's "public use" requirement sanctioned the scheme.

The book destroys the myth that decisions about what property to take are the result of objective and transparent public processes. More often than we'd like to think, eminent domain dispossess the politically powerless of their land and businesses in favor of moneyed private insiders, and the claimed public benefits are incidental to overwhelming private gain.

In the end, Susette Kelo lost. The court agreed with the NLDC that a privately owned hotel was a public use of her little pink house. When Kelo refused to move from the neighborhood, it simply moved her neighborhood from around her: It bulldozed every house until only hers remained.

Hawaii's local governments are not immune from similar behavior, and in a series of two cases, Hawaii's courts went a long way toward repudiating Kelo's stained legacy. In 1998, the County of Hawaii agreed with the developer of the luxury Hokulia project to take land from Hokulia's neighbors for a road to service the project.

The developer told the landowners that if they did not give in, it would order the county to take their land. When one family objected, the developer did just that.

The county claimed the road would alleviate traffic, but the landowner asserted the taking was primarily for Hokulia's benefit. After seven years of litigation, a Kona Circuit Court ruled the taking was illegal because the county had, in effect, sold the decision whether to exercise eminent domain to the developer.

While that lawsuit was ongoing, the county filed a second lawsuit to take virtually the same land. The Hawaii Supreme Court vacated that taking and held courts should not accept government's claims that a taking serves a public purpose at face value and have a constitutional obligation to consider evidence of private benefit. That decision has been labeled the most important eminent domain case nationwide in 2008 and would not have been possible without Susette Kelo.

Read "Little Pink House" to find out why she -- and Stevie Wonder -- would be proud.

----------------------------------------------------

Little Pink House - A True Story of Defiance and Courage by Jeff Benedict (Grand Central Publishing 2009) (available from Amazon here)

Field Of (Broken) Dreams In New London?

That now-cliched line from Field of Dreams, "if you build it they will come" (actually, it's "he will come," but work with us here) seemed to be the driving force behind the New London Development Corporation's plans for the Fort Trumbull neighborhood when it wanted to condemn the homes of Susette Kelo and her neighbors. If they condemned, Pfizer would come.

They condemned the hell out of it, but it turns out that it wasn't the pharmaceutical giant that came, or even Shoeless Joe and his Black Sox. According to a report in the New London, Connecticut paper The Day, birds -- killdeer, red-winged blackbirds, mourning doves and others -- have come: "Fort Trumbull Neighborhood Is For The Birds."

When Spinoza observed some 350 years ago that "nature abhors a vacuum," the Fort Trumbull peninsula hadn't seen its first fort yet, let alone any hints of the epic property-rights struggle to come as the 21st century dawned.

Now, just two years after the last house was razed by the New London Development Corp. for an as-yet unrealized new development, the former neighborhood is something of a demonstration site for the Dutch philosopher's famous insight. The empty lots once occupied by yards, porches and office buildings are turning into a meadow of wildflowers, milkweed and tall grasses, and the birds are moving in.

As Professor Gideon Kanner commented on this story last week, You Can't Make this Up. See also Eminent Domain is for the Birds, from Reason's blog.

HAWSCT: Property Owners Entitled To Attorneys Fees & Costs For Failed Taking, Even If Gov't Prevails In Intermediate Steps

Under Haw. Rev. Stat. § 101-27, when a condemnation action is "abandoned or discontinued before reaching a final judgment, or if, for any cause, the property concerned is not finally taken for public use," the condemnor is liable for: 

all such damage as may have been sustained by the defendant by reason of the bringing of the proceedings and the possession by the plaintiff of the property concerned if the possession has been awarded including the defendant's costs of court, a reasonable amount to cover attorney's fees paid by the defendant in connection therewith, and other reasonable expenses

In County of Hawaii v. C&J Coupe Family Ltd. P’ship, 119 Haw. 352, 198 P.3d 615 (Dec. 24, 2008) (posted here), the Hawaii Supreme Court held that property is not "finally taken" in a condemnation action when a single condemnation fails or is dismissed, even if the condemnor succeeds in a subsequent -- or concurrent -- attempt to take the property. [Disclosure: we represent the property owner in these cases.]  The court remanded the issue of damages sustained at the trial court level, and in a May 14, 2009 order (posted here), the trial court awarded the property owners 100% of the attorneys fees incurred at trial, including over $1.5 million in attorneys fees and $111,000 in costs.

Additionally, in County of Hawaii v. C&J Coupe Family Ltd. P'ship, No. 28822 (Apr. 21, 2009) (opinion posted here), the Supreme Court held that a condemnee is also entitled to damages it sustains on appeal.  As noted in this post, however, we asked the Supreme Court to reconsider its conclusion that the property owner was not entitled to damages associated with the County's motion to transfer the consolidated appeals from the Intermediate Court of Appeals to the Supreme Court because "the County prevailed" on that motion.  See slip op. at 29-30.  Today, in an order, the court agreed and amended its earlier opinion to read:

Although the County prevailed on that motion, it appears that Appellant has properly included attorneys' fees incurred in defending the motion to transfer in its Request, inasmuch as fees are encompassed under HRS § 101-27 as part of "all such damage as may have been sustained by the defendant by reason of the bringing of the proceedings" in Condemnation 1.  Therefore, those entries will be included in the fee award.

Order at. 5. In other words, what matters for the determination of governmental liability under section 101-27 is whether the property is "finally taken," not whether the government may win intermediate steps along the way. If the taking fails, the government is liable for all of the property owner's fees and costs, even those related to motions the government may have won.

The court did not amend any other portion of the opinion, noting that "costs of court" claimed under section 101-27 must be reasonable, and that copying costs are not included within the meaning of the term "costs of court" as used in that statute.  The amended opinion is available here.

Minn Court Of Appeals: Redevelopment Agency Exceeded Delegation Of Eminent Domain Authority

In Eagan Economic Development Authority v. U-Haul Company of Minnesota, No. A08-0767 (May 19, 2009), the Minnesota Court of Appeals held that when a delegation of eminent domain power from a municipality requires a redevelopment agency to enter into a development agreement before acquiring property, the agency is without power to take property until it enters such an agreement.

Most property owners within the redevelopment district did not object to the taking of their land but three did.  They argued that the city's resolution delegating condemnation power to the redevelopment agency incorporated a redevelopment plan into its requirements by reference.  As noted by the court, section 1-8 of the resolution provided:

The Redevelopment Plan contemplates that the City may acquire property and reconvey the same to another entity. Prior to formal consideration of the acquisition of any property, the City will require the execution of a binding development agreement with respect thereto and evidence of Tax Increments or other funds will be available to repay the Public Costs associated with the proposed acquisition.

Slip op. at 9 (emphasis original). The agency, however, argued that the redevelopment plan granted it broader authority and did not require it to enter into a development agreement first:

The second provision is section 1–12, which is a broader statement of acquisition of land: "The City may acquire such property, or appropriate interest therein, within the Redevelopment Project Area as the City may deem necessary or desirable to assist in the implementation of the Redevelopment Plan."

Id.  The agency did not enter into a development agreement, and the district court accepted its argument that the "broad language ... swallow[ed] the limiting language." Slip op. at 10. The court of appeals held the opposite, that the broad delegation in 1-12, which provided the "full extent" of the city's condemnation power, was "unequivocally qualif[ied]" by section 1-8 which made the entry into a development agreement the condition precedent to the exercise of the condemnation power. The court held:

The immediately apparent problem with the district court’s interpretation, which the EDA asks us to adopt, is that it disregards two well-worn maxims of statutory interpretation: First, a statute should be interpreted to give effect to all of its provisions, and, second, to the extent two provisions cannot be reconciled, the more specific provision should prevail over the general. Contrary to the EDA’s invitation to disregard section 1–8, we can reasonably give effect to both provisions by applying these principles so that neither part of the resolution is superfluous or insignificant.

Slip op. at 11 (citations omitted). The court also rejected the argument that the language limited the city's condemnation power but did not limit the agency's. The court noted that the city could delegate "no more power than the city possessed," and the delegation was limited by the city's self-imposed development agreement precondition. Slip op. at 12.  

More background on the case in Court rules against Eagan in eminent domain case.

Government Must Pay 100% Of Owner's Defense Fees In Illegal Condemnation

Under Haw. Rev. Stat. § 101-27, when a condemnation action is "abandoned or discontinued before reaching a final judgment, or if, for any cause, the property concerned is not finally taken for public use," the condemnor is liable for: 

all such damage as may have been sustained by the defendant by reason of the bringing of the proceedings and the possession by the plaintiff of the property concerned if the possession has been awarded including the defendant's costs of court, a reasonable amount to cover attorney's fees paid by the defendant in connection therewith, and other reasonable expenses

The County of Hawaii filed a condemnation lawsuit, and when it looked like that action was in legal jeopardy, filed a second lawsuit seeking to take virtually the same property. The trial court eventually held the first condemnation was an unconstitutional private taking, but upheld the second.  The County denied it was liable for 101-27 damages even though the property was not taken in the first condemnation, because it was successful in the second. 

In County of Hawaii v. C&J Coupe Family Ltd. P’ship, 119 Haw. 352, 198 P.3d 615 (Dec. 24, 2008) (posted here), the Hawaii Supreme Court held that property is not "finally taken" in a condemnation action when a single condemnation fails or is dismissed, even if the condemnor succeeds in a subsequent -- or concurrent -- attempt to take the property. The Supreme Court ordered the trial court the issue of the amount of damages incurred in the trial court, and in a May 14, 2009 order (posted here), the trial court awarded the property owners all of the attorneys fees incurred at trial, including over $1.5 million in attorneys fees and $111,000 in costs.  The court held the rates charged for professional services were reasonable "given the complexity, breadth, and amount of issues presented in this case and the extensive experience of counsel in this area of law." Disclosure: we represent the property owner in these cases.

WA Court Of Appeals: Delegations Of Eminent Domain Power To Municipalities Strictly Construed

A state law providing that airport boards may exercise the powers of the municipalities which appoint them, but which also requires a condemnation action by an airport board "be instituted in the names of the municipalities jointly," prohibits an airport board from instituting an eminent domain suit in its own name. In Spokane Airports v. RMA, Inc., No. 26538-2-III (Apr. 28, 2009), the Washington Court of Appeals held that any condemnation suit filed by the airport board that is not in the names of the municipalities lacks subject matter jurisdiction.

The City of Spokane and Spokane County jointly operate the Spokane International Airport, and formed the Spokane Airport Board to operate it. The airport needed to remove some buildings, including several which were leased to RMA, so the city and the county passed a resolution of taking condemning the leases. The Airport Board, purporting to act pursuant to the authority in the resolution, instituted a condemnation lawsuit in its own name.

The Washington state law empowering airport boards (Wa. Rev. Code § 14.08.200) provides that "[c]ondemnation proceedings shall be instituted, in the names of the municipalities jointly, and the property acquired shall be held by the municipalities as tenants in common." RMA asserted the condemnation action was invalid because it was the product of an illegal delegation of eminent domain power from the city and county to the Airport Board. In other words, the Airport Board had no authority to sue in condemnation in its own name. 

The court of appeals began its analysis by noting "[w]e strictly construe statutes that delegate the state's sovereign power of eminent domain." Slip op. at 11 (citing Pub. Util. Dist. No 2 of Grant County v. N. Am. Foreign Trade Zone Indus., 151 P.3d 176 (Wa. 2007)). The court distinguished State v. King County, 446 P.2d 193 (Wa. 1968), a case which held there was no illegal delegation of eminent domain power where a local board brought a condemnation suit in the state board's name under a statute with wording similar to section 14.08.200:

King County is distinguishable. There, the local board complied with a requirement set out in the resolution—that any condemnation action be filed in the name of the state board. Here, the joint resolution contained no such requirement. And Spokane Airports brought the condemnation petition in its name only. The joint resolution here attempts to delegate powers of eminent domain to Spokane Airports, not just ministerial functions.

The City and the County did not have authority to delegate their power to condemn to Spokane Airports. At most, they could authorize Spokane  Airports to exercise the ministerial duties attendant to taking RMA's property by condemnation.

Slip op. at 12-13. The court also held that the delegation issue was a question of subject matter jurisdiction, and could be raised for the first time on appeal:

We conclude that Spokane Airports had no authority to condemn property, that its activities here were more than ministerial, and that the superior court then had no jurisdiction over the subject matter of this controversy.

Slip op. 16. Our thanks to the Amateur Law Professor blog for notice about this decision.

West Hawaii Today On Latest HAWSCT Opinion In Eminent Domain Abuse Cases

The Big Island's West Hawaii Today reports "Both sides claim win in latest ruling" about the Hawaii Supreme Court's recent opinion in the cases involving the County of Hawaii's attempt to take the property of a Kona family to meet the County's obligations under a development agreement with the developer of the Hokulia project.  Disclosure: we represent the property owner in these cases.

In County of Hawaii v. C&J Coupe Family Ltd. P'ship, No. 28822 (Apr. 21, 2009) (posted here), the court confirmed that a property owner is entitled to be made economically whole pursuant to Haw. Rev. Stat. § 101-27, including the reasonable attorneys fees and costs it incurs on appeal when its property is not "finally taken" for public use. The trial court struck down an attempted taking for a road for lack of public use,

The road, part of a development agreement between the county and Oceanside 1250, developers of the Hokulia luxury community makai of Kealakekua, is 60 percent complete despite more than seven years of litigation.

In a separate eminent domain case against the same owners prosecuted concurrently, the trial court held the property could be taken, so the County refused to pay section 101-27 damages. In County of Hawaii v. C&J Coupe Family Ltd. P’ship, 119 Haw. 352, 198 P.3d 615 (Dec. 24, 2008) (posted here), the Supreme Court rejected the County's argument, holding that if property is not taken in an eminent domain case the County must make the owner economically whole, even if the property is taken in another case.

The Supreme Court also vacated the second taking attempt, remanding it to the trial court for an inquiry into whether the asserted public purpose was pretextual.  The report continues:

Still forthcoming is a ruling by Ibarra on whether the county condemned the land on a pretext on behalf of developers instead of for an actual public benefit. The Supreme Court sent that portion of the case back to the lower court after hearing arguments on it last year.

Ibarra's clerk could not say Wednesday when that ruling might be made. Ibarra received briefs from the parties in the case last month.

In September 2007, Ibarra ruled the county could take the property by paying $162,204.83 for the land, plus interest and 10 percent annually for "blight" damages.

The Coupes appealed, saying the county lost its condemnation claim and can't just keep filing new ones until one sticks. Attorneys argue the public purpose is just a pretext, as the real benefit goes to Hokulia, not the public.

"These arguments are not about a road. They're about the law," Robert Thomas, an attorney for the trust, said in oral arguments in October. "The government in cases of eminent domain has a huge advantage. It creates the facts. ... If they lose, they're not prohibited from trying again and again and again."

The strip of property is part of a 51/2-mile limited access road that will eventually link Napoopoo Junction in South Kona with Keauhou and beyond to the planned Alii Parkway. It's being built by Oceanside 1250 as one of a number of community benefits in return for the right to build Hokulia.

Hawaii County and Oceanside 1250 contend the road has been on planning maps for decades and serves an obvious public purpose in relieving heavy traffic through the mauka Kona area.

Our proposed Findings of Fact and Conclusions of Law on the pretext issue are posted here ("Determining Eminent Domain Pretext In Serial Takings").

Little Pink House Event Report

I was fortunate enough yesterday to attend an event with Jeff Benedict, who spoke about his recently-published book Little Pink House - A True Story of Defiance and Courage (Grand Central Publishing 2009) (available from Amazon here). 

Little Pink House gives the backstory to the infamous Supreme Court eminent domain decision Kelo v. City of New London, 545 U.S. 469 (2005). It's not a dry recounting of the legal issues or the Court's opinion, but a story of how one property owner's determination to keep her home ended up in the U.S. Supreme Court, and eventually took on a life of its own. The book has been reviewed in the New York Times and the Wall Street Journal among other places.  Robert S. Poliner, the Connecticut Ombudsman for Property Rights also reviewed the book; we've reprinted his review here.

The highlights of Benedict's talk:

• The first contact Susette Kelo received from the New London Redevelopment Corporation was a knock on the door and an agent asking "how can we help you relocate?"

• He felt the "ah-ha" moment in the legal case was when Justice O'Connor asked NLDC's attorney "do you mean that the city can take land from Motel 6 and give it to the Ritz-Carlton, if the Ritz is projected to generate more taxes?"  NLDC's counsel answered "yes."

• He also described how an issue that is lost in the Supreme Court can turn into a winner in the long run.

Dana Berliner and Scott Bullock from the Institute for Justice --  the attorneys who represented Susette Kelo -- also spoke.  Bullock noted that Kelo was the logical endpoint for the Court's takings clause jurisprudence which has strayed from the "public use" set forth in the text of the Fifth Amendment.  He noted the interpretation has transformed from "public use" to "public purpose," and that now it means "public benefit."  He also noted that the universal revulsion at the Court's decision resulted in many state courts and legislatures rejecting it.  He wrapped up by noting that the little pink house was taken apart and rebuilt on another site in New London as a permanent reminder, and that the original site of Kelo's house remains vacant to this day.

Berliner focused on California law, particularly its redevelopment code and the ease of a "blight" finding. She referenced the 2008 study by the IJ "California Scheming," which details how so-called "blight" designations can be abused to cloud property for years.

We recommend: read the report, read the book.

Links From Today's ABA Teleconference: Hot Topics In Land Use Law 2009

Thank you to those who were able to join us live for today's teleconference. Here are the links to the additional cases and other items I mentioned (or wanted to mention) in my session on Public Use and Pretext Update:

• Proving Eminent Domain Pretext In Serial Takings - County of Hawaii v. C&J Coupe Family Ltd. P’ship, 198 P.3d 615 (Haw. Dec. 24, 2008) (proposed Findings of Fact and Conclusions of Law on remand)

• Book Review: Little Pink House by Robert S. Poliner, Connecticut Ombudsman for Property rights

• New Eminent Domain Book: Current Condemnation Law - Takings, Compensation & Benefits (2d ed.)

• Eminent Domain Use and Abuse: Kelo in Context (ABA 2007) (Dwight Merriam, Mary Massaron Ross, eds.)

• Might Makes Blight In The New York Appellate Division - Develop Don't Destroy Brooklyn v. Urban Dev. Corp., 2009 NY Slip Op 01395 (Feb. 26, 2009)

• New Cert Petition - Dolan Proportionality And Individualized Determination Applies To In-Lieu Fees - the cert petition seeking review of Joy Builders, Inc. v. Town of Clarkstown, 11 N.Y.3d 863 (2008)

• California Court of Appeal: No TKO Of Eminent Domain Challenge - Community Youth Athletic Center v. City of National City, No. D052584 (Jan. 22, 2009)

The 2009 version of this popular annual program covered the latest developments in several areas of the law related to land use regulation.  Among the topics were the ability of town boards to control obstreperous speakers; the latest law concerning ethical constraints on state and local officials and the citizens who appear before them; restrictions on the government's ability to limit religious land uses under the Religious Land Use and Institutionalized Persons Act (RLUIPA); what's new concerning cell tower sitting; new law about impact fees and exactions; and citizen input into brown fields restoration and the backlash against it. I spoke about the latest developments in eminent domain and pretext. Also on the faculty were Daniel Dalton, Robert B. Foster, W. Andrew Gowder, Jr., and Jeffrey Kleeger. Paul D. Wilson moderated.  More here, including information about purchasing the CD recording.

If you have any questions or comments you weren't able to ask or make during the teleconference, please drop me an email.

Links From ABA Condemnation Hot Topics Teleconference

Thank you to those who were able to join us live for today's teleconference. Here are the links to the additional cases and other items I mentioned (or wanted to mention) in my session on Public Use and Pretext Update:

• Might Makes Blight In The New York Appellate Division - Develop Don't Destroy Brooklyn v. Urban Dev. Corp., 2009 NY Slip Op 01395 (Feb. 26, 2009)

• Determining Eminent Domain Pretext In Serial Takings - County of Hawaii v. C&J Coupe Family Ltd. P’ship, 198 P.3d 615 (Haw. Dec. 24, 2008) (proposed Findings of Fact and Conclusions of Law on remand)

• Book Review: Little Pink House by Robert S. Poliner, Connecticut Ombudsman for Property rights

• First Circuit: Williamson County Applies To Eminent Domain Challenges - Lichoulas v. City of Lowell, No. 08-1485 (1st Cir. Jan. 20, 2009)

• New Eminent Domain Book: Current Condemnation Law - Takings, Compensation & Benefits (2d ed.)

• How To Prove A Substantive Due Process Zoning Case - Cine SK8, Inc. v. Town of Henrietta, 507 F.3d 778 (2d Cir. 2007)

• Williamson County, removal, and remand of regulatory takings case after municipality created wetlands - Yamagiwa v. City of Half Moon Bay, 523 F. Supp. 2d. 1036 (N.D. Cal. 2007)

• California Court of Appeal: No TKO Of Eminent Domain Challenge - Community Youth Athletic Center v. City of National City, No. D052584 (Jan. 22, 2009)

• Eminent Domain Use and Abuse: Kelo in Context (ABA 2007) (Dwight Merriam, Mary Massaron Ross, eds.)

The program examined new and important condemnation cases and trends, and also reviewed eminent domain as a backdrop for land use regulation. Also on the faculty were Robert Freilich, Mary Lynn Huett, and Edward Sullivan. Professor Steven Eagle moderated. More here, including information about purchasing the CD recording.

If you have any questions or comments you weren't able to ask or make during the teleconference, please drop me an email.

More On Pretext In Eminent Domain

Following up on this story, West Hawaii Today reports "Attorneys argue against Supreme Court ruling on bypass," about whether a second attempt to condemn property ostensibly for a road is pretextual when the court determined the first attempt was unconstitutional and nothing changed:

Attorneys for the Richards family and the Coupe Trust, in documents filed in 3rd Circuit Court Friday, argue that the condemnation action initiated by Hawaii County in 2005 was essentially the same as one filed in 2000 and later dismissed.

Disclosure: we represent the property owner in this case.

The Hawaii Supreme Court in County of Hawaii v. C&J Coupe Family Ltd. P’ship, 198 P.3d 615 (Haw. Dec. 24, 2008) (posted here) held that courts have an obligation to take allegations of pretext seriously -- even when the taking is for a "classic" public use -- and remanded the case for consideration of evidence of pretext.

The proposed findings we submitted referenced in the WHT article are available here. The County of Hawaii's proposed findings are available here. For further detail and analysis, see "Determining Eminent Domain Pretext in Serial Takings."

[Note: the headline is a bit off -- no one is arguing "against" the Supreme Court ruling; on remand the parties are applying the Supreme Court ruling.]

Determining Eminent Domain Pretext In Serial Takings

As reported in this story from West Hawaii Today, a Hawaii trial court is considering whether a second attempt to condemn property ostensibly for a road is pretextual when it determined the first attempt was unconstitutional. Disclosure: we represent the property owner in this case.

"Classic" Uses Not Immune

In County of Hawaii v. C&J Coupe Family Ltd. P’ship, 198 P.3d 615 (Haw. Dec. 24, 2008) (posted here), the Hawaii Supreme Court held that even when a taking appears to be for a public purpose, the government's assertions "need not be taken at face value where there is evidence that the stated purpose might be pretextual," Id. at 644. The court held that courts should consider a landowner’s defense of pretext even when a "classic" use such as a road is involved, and "the single fact that a project is a road does not per se make it a public road."  Id. at 643 (emphasis original) (quoting City of Novi v. Robert Adell Children’s Funded Trust, 701 N.W.2d 144, 150-51 (Mich. 2005)).

The Hawaii Supreme Court remanded the case to the trial court for consideration of pretext and private benefit in light of all the circumstances.

Examine Circumstances For Private Benefit, Not Just Government's Claims of Public Benefit

Those circumstances include a final decision by the trial court invalidating the earlier attempt to take the property. The trial court declared that a condemnation was not for public use because it was the product of a development agreement between the County and a luxury developer which provided among other things that the developer had the "sole discretion" to control condemnation, would take possession of the property after the taking, would determine the location of the road and what property was needed, and controlled when the property would be taken. The developer also provided the appraisals and the compensation, and the developer's attorneys threatened property owners that if they didn't "voluntarily" sell their land, it would be taken. The first condemnation action was filed in 2000, and was based on a resolution of taking which expressly noted the taking was instituted in furtherance of the development agreement.

Rebooting As Cure?

While the trial court was considering the property owners' objections to that taking, the County filed a second taking against the same property owners in 2005 to take the same property it was already trying to take in the 2000 action (plus 1/2 acre more that the developer determined it needed). The resolution of taking in the second case, however, unlike the first resolution, did not mention the development agreement. The County has never explained why the second condemnation was necessary. See Coupe, 198 P.3d  at 623 (The Hawaii Supreme Court only noted that County adopted the second resolution of taking "[f]or unstated reasons."). Given that the 2000 condemnation appeared to be in trouble because of the resolution's express recognition of the development agreement, it was apparent that the second condemnation try was an attempt to "reboot" a floundering case, and cure the legal defects that were stalling the first condemnation. 

Eventually, after a consolidated trial in the two condemnations, the court entered two judgments. First, it held that the 2000 condemnation was not for public use and the County illegally delegated its eminent domain power to the developer. Second, the court held the 2005 condemnation was valid since the resolution did not mention the development agreement and was adopted by a county council comprised of several different members. The first judgment was not appealed by the County or the developer. As noted above, the Hawaii Supreme Court reversed the second judgment and remanded for further consideration.

Pretext: One-to-One Transfers To Identified Parties Outside a Carefully Considered Plan

The issue now before the trial court is whether the 2005 condemnation is essentially a sham, and in reality was for the same purpose as the invalid 2000 condemnation. Yesterday was the date for all parties to submit their proposed factual findings and legal conclusions; the proposed findings we submitted are available here (1.5mb pdf).

Pretext may be present in at least three situations: (1) when eminent domain is used to transfer the private property of one party to another private party where the magnitude of public benefits outweighs the private benefit; (2) when eminent domain is used for a one-to-one transfer of private property without a comprehensive, integrated, and carefully considered development plan; and (3) where a particular private party is identified before the taking. See Kelo v. City of New London, 545 U.S. 469, 478 & n.6 (2005). 

Two and three are the critical points. The 2005 taking was for a specific party, the developer, and was a one-to-one transfer, and the County didn't have any plan to take the property independent of the development agreement condemnation plan. 

• As in the 2000 condemnation, in the 2005 condemnation, the County did not follow the usual condemnation procedure such as independent appraisal, survey and land agent. The developer determined the property to be taken, and the amount of compensation offered.

• Although the County knew that land values had increased in the area over the years since the filing of the 2000 condemnation, it did not increase either the value of the compensation or make any effort to increase the deposit. The complaint in the second condemnation listed the same value used five years before in the first.  

• The County made no effort before filing the 2005 condemnation to negotiate an acquisition based upon the then-current value.

• As in the 2000 condemnation, the property description was provided by the developer, which increased the area of land to be taken by approximately 1/2 acre to coincide with the land that the developer had selected. The County never verified the accuracy of the survey or the extent of alteration.

• When it filed the 2005 condemnation, the County did not dismiss or amend the 2000 condemnation, and prosecuted both simultaneously. 

Serial Condemnations Especially Problematic

In a forthcoming article, Daniel Kelly points out that serial condemnations in which an attempt to take property is invalidated are particularly susceptible to pretextual government actions:

Futility refers to a court’s inability to prevent governmental actions that are based on impermissible motivations because of the government’s ability to circumvent judicial scrutiny. For example, government officials can hide their actual motivations, including pretextual ones.  Moreover, even if a court detects an impermissible motivation and invalidates a governmental action on that basis, officials may decided to take the same action without disclosing their actual motivation, thereby circumventing the judicial test.

See Pretextual Takings: Of Private Developers, Local Government, and Impermissible Favoritism at 7. 

Out-Of-Proportion In-Lieu Affordable Housing Exaction Opinion Modified

The modified opinion in Building Industry Ass'n of Central California v. City of Patterson, No. F054785 (Cal. Ct. App. Mar. 2, 2009), a case we summarized here, has been further modified in this order. The latest modifications do not alter the judgment that the a city could not increase an in-lieu affordable housing exaction from $734 to $21,000 per house in a proposed development, because it failed to show the increase was attributable to the development.

Cal. Court of Appeal Strikes Down Out-Of-Proportion In-Lieu Affordable Housing Exaction

In Building Industry Ass'n of Central California v. City of Patterson, No. F054785 (Cal. Ct. App. Mar. 2, 2009), the California District Court of Appeal held that the city could not increase an in-lieu affordable housing exaction from $734 to $21,000 per house, because it failed to show the increase was attributable to the development.

The City of Patterson entered into a development agreement with the landowner in which the city agreed the owner would pay only those affordable housing fees in effect at the time the agreement was executed. The agreement recognized, however, that the exaction may be increased and that the city was preparing an "updated analysis." The owner agreed to pay the revised exaction, provided it was "reasonably justified." Predictably, the city revisited the exaction schedule and after study that changed the methodology of calculating the fee, revised it to $20,946 per market rate unit. After the owner sued, the trial court held the new methodology used by the city to calculate the new exaction was reasonable, and ruled the owner must pay the increased exaction.

The court of appeal noted "the critical question in this appeal is whether the increased fee complied with the terms of the Development Agreement." Slip op. at 9. The court rejected the owner's assertion the "reasonably justified" language prohibited the city from changing its method of calculating the affordable housing fee since the owner acknowledged the city was preparing an "updated analysis" which did not limit the city to any particular methodology.

The court turned next to the issue of the meaning of "reasonably justified."  The owner argued this term incorporated existing law and that any increase must conform to the law governing exactions, while the city asserted it in effect waived applicable law.  The court sided with the owner, holding:

Here, we conclude that an objectively reasonable person would expect the term "reasonably justified" to mean that any increase in the affordable housing in-lieu fee would conform to existing law. In other words, part of the way one would show a fee is reasonably justified is to show that it does not violate established legal principles. The contrary interpretation, which would conclude that the term did away with applicable legal requirements, would create much greater change in the relationship between the parties. An objectively reasonable person would expect more explicit language to implement such a change. Thus, it is too great a leap to infer that the term "reasonably justified" demonstrates an intention to waive applicable legal requirements.

Slip op. at 12. The court applied California's law of exactions, which requires a "reasonable relationship" between the amount of the fee and the burdens on public facilities attributable to the development.  The court concluded the city's fee increase was not reasonably related to the need for affordable housing generated by the owner's project. Slip op. at 13. The study conducted by the city did not justify the increase since it did not calculate the fee based upon the project's creation of the need for affordable housing:

Instead, the Fee Justification Study shows that the affordable housing in-lieu fee of $20,946 per market rate unit was calculated based on an estimate of City's need for 642 units of affordable housing. No connection is shown, by the Fee Justification Study or by anything else in the record, between this 642-unit figure and the need for affordable housing generated by new market rate development. Accordingly, the fee calculations described in the Fee Justification Study and Moran's declaration do not support a finding that the fees to be borne by Developer's project reflected the costs attributable to it.

Slip op. at 14.

"Ceded Lands" Case, Land Use Round-Up

Some interesting reports today:

• Oral Argument in Atlantic Yards Eminent Domain Case Monday - the latest chapter in Brooklyn's "Atlantic Yards" redevelopment project (via Gowanus Lounge).  More on the arguments from Atlantic Yards Report here.

• Hawaiians urge Obama to step in on ceded lands -  an AP story reporting that "Hawaii legislators and legal groups are asking President Barack Obama to intervene in the Hawaiian lands case set to be heard by the U.S. Supreme Court next week." (via KPUA.net). The Obama Administration has "intervened" in the case, but not in a way the groups probably had in mind: the acting Solicitor General sought and was granted 10 minutes of oral argument time to support the State of Hawaii's argument, as noted here. "The groups believe leftover appointees of former President George W. Bush are arguing a position that's inconsistent with Obama's views." That would be odd, if true, since the SG's office filed its motion on January 29, 2009 (available here) which reiterated the arguments supporting the State in its amicus brief, well after the Obama Administration -- which appears to take a very "stay on message" approach to all things -- had taken over. Further, it was submitted by a long-time career deputy SG, not a Bush political appointee.  An interesting twist to the issue is that OHA's counsel of record in the ceded lands case until recently was Georgetown lawprof Neal Katyal who stepped down from representing OHA when he was appointed by President Obama as the principal deputy SG.

• This land is my land, this land is my land - a good summary (with links) of the "ceded lands" case, which reports "Hawaiian activists plan to set fire to Gov. Linda Lingle’s U.S. Supreme Court petition and light their torches with it as they rally at the state Capitol against the administration’s plans to sell some of the land it holds in trust." (via allhawaiinews)

• City abused eminent domain to steal property, California court rules - a report about City of Stockton v. Marina Towers LLC, No. C054495 (Feb. 13, 2008), a decision by the California Court of Appeal striking down the city's taking of property because it was so "nondescript [and] amorphous," and "so vague, uncertain and sweeping in scope that it failed to specific the 'public use' for City sought acquisition of the property." (via examiner.com) We digested the opinion here.

Materials From 2/20/2009 Land Use Seminar

Here are the links to the cases that I spoke about in my session in today's seminar "Supreme Court, Regulatory Takings and Eminent Domain Update."  Not all of the cases we discussed today are included below, so if you would like a link or more information about a case that is not listed, please email me at rht@hawaiilawyer.com and I will send it to you.

• County of Hawaii v. C & J Coupe Family Limited Partnership, No. 28882 (Dec. 24, 2008) - public use, pretext, and damages for failed taking

The majority opinion by Justice Acoba, joined by Justices Nakayama and Duffy is posted here:

We hold that (1) a landowner in a condemnation action is entitled to damages under HRS § 101-27 where the property at issue is not finally taken in the context of a particular condemnation proceeding, irrespective of whether the government attempts to take the land through subsequent condemnation proceedings; (2) abatement does not apply where the relief sought in two concurrent actions is not the same; and (3) although our courts afford substantial deference to the government's asserted public purpose for a taking in a condemnation proceeding, where there is evidence that the asserted purpose is pretextual, courts should consider a landowner's defense of pretext.  Therefore, (1) automatic denial of statutory damages under HRS §101-27 in Condemnation 1 is vacated and the case remanded for a determination of damages, (2) the court's conclusion that Condemnation 2 was not abated by Condemnation 2 is vacated and the case remanded for a determination of whether the public purpose asserted in Condemnation 2 was pretextual.

Slip op. at 5. Here's the concurring and dissenting opinion by Chief Justice Moon joined by Justice Levinson. The briefs in the case are available here:  Opening Brief, Answering Brief of the County of Hawaii, Reply Brief. Disclosure: we represent the property owner.

• When a project not being built on state or county land meets the definition of "use" of such lands triggering chapter 343 environmental review - Nuuanu Valley Ass'n v. City & County of Honolulu, No. 28599 (Oct. 24, 2008)

• Illinois Supreme Court decision about the 3% "surcharge" on casinos, which was given to horse racing tracks. Empress Casino Joliet Corp. v. Giannoulias, No. 104586 (June 5, 2008)

• Is destruction of evidence seized from an innocent third party a taking? AmeriSource Corp. v. United States, No. 08-497 (cert. petition filed Oct. 15, 2008)

• Development Moratorium a Taking Under Lucas - Monks v. City of Rancho Palos Verdes, No. B201280 (Cal. Ct. App. Oct. 1, 2008)

• No private right of action to enforce zoning - The Hawaii Intermediate Court of Appeals, in Pono v. Molokai Ranch, Ltd., 119 Haw. 163, 194 P.3d 1126 (2008), held that a private party had no standing to enforce the state's land use laws. The Hawaii Supreme Court rejected certiorari review of the case.  Disclosure: we represent the landowner. More here.

• Charles A. Pratt Constr. Co. v. California Coastal Comm'n (cert petition on Williamson County and Penn Central)

• Aspen Creek Estates, Ltd. v. Town of Brookhaven - New York Court of Appeals  (comprehensive taking plan)

• City of Stockton v. Marina Towers LLC - Cal. Court of Appeal (details required in resolution of necessity)

• Resource Investments, Inc. v. United States - Court of Federal Claims (massive opinion and primer on regulatory takings - erroneous exercise of jurisdiction as a temporary taking)

• Florida regulatory takings cases - Florida Supreme Court and District Courts of Appeals

• Substantive due process in the Ninth Circuit after Lingle - The Ninth Circuit Rediscovers Substantive Due Process in Land Use Cases

Schedule In Kona Eminent Domain Pretext Case

The circuit court has scheduled the next steps in County of Hawaii v. C & J Coupe Family Limited Partnership, No. 28882 (Haw. Dec. 24, 2008), the case in which the Hawaii Supreme Court held that the government must pay damages to a property owner when an attempt to take property by eminent domain fails, and that courts have an obligation to examine claims that the government's asserted public purpose for a taking is pretextual, even when the taking is for a "classic" public use. The Court remanded the case to the circuit court for a consideration of the amount of damages owed to the property owners, and the pretext issue. [Disclosure: we represent the property owners.]

The schedule for the case is reported by West Hawaii Today here.

Materials From Hawaii Land Use Law Conference

To those who attended Thursday's and Friday's conference, thank you.  Here are the cases and other materials I mentioned in my portion:

• Shoreline setbacks and equitable estoppel - Brescia v. North Shore Ohana 115 Haw. 477, 168 P.3d 929 (2007) 

• State shoreline setback - Haw. Rev. Stat. § 205A-43

• Counties have authority to enact their own setbacks - Haw. Rev. Stat. § 205A-45

• No private right of action to enforce zoning - The Hawaii Intermediate Court of Appeals, in Pono v. Molokai Ranch, Ltd., 119 Haw. 163, 194 P.3d 1126 (2008), held that a private party had no standing to enforce the state's land use laws. The Hawaii Supreme Court rejected certiorari review of the case.  Disclosure: we represent the landowner. More here.

• Maunalua Bay Beach Ohana 28 v. State of Hawaii, the appeal now pending in the Intermediate Court of Appeals.  The issue in that case is whether the state or littoral landowners are entitled to ownership of accreted land. In "Act 73," the legislature declared that shoreline land naturally accreted belongs to the State of Hawaii and is public property.  The act overturned the age-old rule of shoreline accretion and erosion, which held that beachfront owners lose ownership of land when it erodes, but gain it when it accretes.  Instead of these balanced rules, Act 73 made the erosion/accretion equation one-sided: the State wins every time.  We filed an amicus brief in the appeal, a copy of which is available here.

• Substantive due process in the Ninth Circuit after Lingle - The Ninth Circuit Rediscovers Substantive Due Process in Land Use Cases

• County of Hawaii v. C & J Coupe Family Limited Partnership, No. 28882 (Dec. 24, 2008) - public use, pretext, and damages for failed taking

The majority opinion by Justice Acoba, joined by Justices Nakayama and Duffy is posted here:

We hold that (1) a landowner in a condemnation action is entitled to damages under HRS § 101-27 where the property at issue is not finally taken in the context of a particular condemnation proceeding, irrespective of whether the government attempts to take the land through subsequent condemnation proceedings; (2) abatement does not apply where the relief sought in two concurrent actions is not the same; and (3) although our courts afford substantial deference to the government's asserted public purpose for a taking in a condemnation proceeding, where there is evidence that the asserted purpose is pretextual, courts should consider a landowner's defense of pretext.  Therefore, (1) automatic denial of statutory damages under HRS §101-27 in Condemnation 1 is vacated and the case remanded for a determination of damages, (2) the court's conclusion that Condemnation 2 was not abated by Condemnation 2 is vacated and the case remanded for a determination of whether the public purpose asserted in Condemnation 2 was pretextual.

Slip op. at 5. Here's the concurring and dissenting opinion by Chief Justice Moon joined by Justice Levinson. The briefs in the case are available here:  Opening Brief, Answering Brief of the County of Hawaii, Reply Brief. Disclosure: we represent the property owner.

• "Arrow of Time, Vested Rights, Zoning Estoppel, and Development Agreements in Hawaii' (published by the U. Hawaii Law Review in Feb. 2006). Drop me an email, and I will email you a pdf, or send you a hard copy (tell me which).

At The ALI-ABA Conference On Eminent Domain And Land Valuation

Currently at the annual conference on eminent domain law - as always, well worth attending.

In the morning's session, Professor Kanner mentioned the recent decision in County of Hawaii v. C & J Coupe Family Limited Partnership, No. 28882 (Dec. 24, 2008), which has not yet been published in the official reporters.  The slip opinion is posted here.

2008 Land Use In Review: Public Use And Pretext In Eminent Domain

One of the bigger developments, at least in Hawaii law, came in the last week of the year. We're talking about the Hawaii Supreme Court's decision in County of Hawaii v. C & J Coupe Family Limited Partnership, No. 28882 (Dec. 24, 2008) (and we're not just hailing the case because we're the attorneys for the landowner).

Note: for those attending the Eminent Domain and Land Valuation Litigation conference, this is the case Professor Kanner mentioned in the morning session as being not reported yet.   See below for the link to the slip opinion.

The Court held that government, not property owners, bears the financial risk that a condemnation fails and, importantly, joins a number of courts in holding that the government's proclamation that a taking is for public use is not immune from judicial inquiry. All five Justices agreed that under Haw. Rev. Stat. § 101-27 (1993), the government must  pay damages (including attorneys fees and courts costs) to make a property owner whole when a taking attempt fails.  Three Justices, in an opinion by Justice Acoba (joined by Justices Nakayama and Duffy) held that a reviewing court must take seriously a property owner's claim that the asserted public use is merely a pretext:

We hold that (1) a landowner in a condemnation action is entitled to damages under HRS § 101-27 where the property at issue is not finally taken in the context of a particular condemnation proceeding, irrespective of whether the government attempts to take the land through subsequent condemnation proceedings; (2) abatement does not apply where the relief sought in two concurrent actions is not the same; and (3) although our courts afford substantial deference to the government's asserted public purpose for a taking in a condemnation proceeding, where there is evidence that the asserted purpose is pretextual, courts should consider a landowner's defense of pretext.  Therefore, (1) automatic denial of statutory damages under HRS §101-27 in Condemnation 1 is vacated and the case remanded for a determination of damages, (2) the court's conclusion that Condemnation 2 was not abated by Condemnation 2 is vacated and the case remanded for a determination of whether the public purpose asserted in Condemnation 2 was pretextual.

Slip op. at 5. The majority opinon is posted here. The Hawaii Supreme Court joined other courts addressing the issue in 2008.  Those opinions will be covered in a separate post, shortly.

Thank You, Star-Bulletin: Corrections And Clarifications

Following up on this post, where we pointed out several errors in a headline and subheadline in a Honolulu Star-Bulletin story on the Hawaii Supreme Court's landmark eminent domain decision in County of Hawaii v. C & J Coupe Family Limited Partnership, No. 28882 (Dec. 24, 2008), the Star-Bulletin has posted corrections and clarifications, here:

» A lawsuit remains active by members of the Coupe family in Kona, seeking to block county condemnation of part of their land for a highway near the Hokulia development. A Page 4 headline in the Hawaii section Saturday said the suit was dismissed by the state Supreme Court. Also, future hearings on the case will not involve ethical allegations, as was stated in a subheadline on the same story.

While still not 100% accurate -- the County of Hawaii instituted the lawsuits against the property owners, not the other way around -- it's heartening to see that the Star-Bulletin's reporters and editors are paying attention and care about accurate reporting enough to clarify two very complex cases that many lawyers would have a hard time getting right in a few paragraphs.

Headline On Kona Condemnation Cases - Not In The Ballpark

I usually try to not take too seriously the headlines attached to a newspaper story or op-ed. After all, an editor -- and not the reporter or op-ed author -- may have written the headline, and it may be designed to grab a reader's attention or focus on a part of the story the editor thinks important. 

But a headline should at least be in the ballpark, factually. 

However, after reading the headline in a Honolulu Star-Bulletin story on the recent Hawaii Supreme Court decision in the Kona bypass condemnations, "Suit to block highway is dismissed" I was left wondering whether there was another case going on over the Hokulia road that I didn't know about.  Turns out no, there's just the two, the headline just got it very, very wrong.   

First, the facts. On December 24, 2008, in County of Hawaii v. C & J Coupe Family Limited Partnership, No. 28882, the Hawaii Supreme Court held the government must pay damages (including attorneys fees and courts costs) when an attempt to take property by eminent domain fails. The Court also held that trial courts cannot simply take the government's word that a taking is "for public use," and have an obligation to take seriously allegations that the government's claimed reason for a taking is not a pretext to private benefit. The Court remanded (send back to the circuit court) two condemnation actions filed by the County against Kona property owners in 2000 and 2005 to take their land for a road to connect the hyperluxury "Hokulia" development with the regional highway.

The 2000 case had been dismissed by the circuit court, which ruled in favor of the landowners that the County illegally gave Hokulia the condemnation power in a Development Agreement. The circuit court, however, did not award the landowners damages after the dismissal. The Supreme Court ordered the circuit court to make the landowners whole, which includes payment of their attorneys fees and costs.

In the 2005 condemnation case, the Supreme Court held the circuit court should have taken seriously the landowners' claims that the County's claimed public use -- relief of traffic -- was instead a pretext to mask the private benefit to Hokulia. The story gets that part right:

However, the high court ordered more hearings by a lower court in Kona on whether Hawaii County wants a portion of the Coupe land merely as a "pretext" to benefit a private residential development, as the family contends.

Thus, there is no "suit to block highway" -- in a condemnation action, the government is the plaintiff and the landowner is the defendant -- and nothing was "dismissed." The subheadline "The state high court orders hearings into ethics allegations over a Big Isle road" is also perplexing. Yes, the Supreme Court ordered further hearings, but not over "ethics allegations." Pretext does not require a showing that the County or Hokulia violated ethics rules or acted in bad faith, merely that there was private benefit to Hokulia.

The lede also is also off the mark:

Proponents of the Hokulia Bypass highway in South Kona passed one legal road roadblock but could have a few more ahead.

The state Supreme Court turned down last week a request by the Coupe family to block construction where the highway would cross the family's property south of the 1,550-acre Hokulia residential development.

I'm not sure what "legal road roadblock" the "proponents of the Hokulia Bypass highway in South Kona passed." The Supreme Court ordered the County to pay damages for the failed 2000 condemnation, struck down the circuit court's determination that the 2005 condemnation was valid, and noted in its opinion several times that neither the County nor Hokulia ever challenged the circuit court's finding that the 2000 condemnation was flatly illegal. The Supreme Court certainly did not "turn down" a request by the landowners to block construction -- indeed, it said the landowners' objections should have been taken seriously.

If that's a "turn down," then I'd like to be turned down more often.

Update - The Star-Bulletin has issued corrections and clarifications on the story, posted here.

"No, I'm Spartacus!"

Thanks to Alan Ackerman for alerting us to the latest horrible development in the eminent domain cases out of Freeport, Texas.  Recall that in Western Seafood Co. v. United States, No 04-41196 (5th Cir., Oct. 11, 2006), the court held that a private-to-private transfer for economic development that was accomplished as part of a "carefully considered development plan" passed muster.

That wasn't the end of the story, since Carla T. Main authored a fantastic book about the case and the Gore family, whose property was taken.  We reviewed "Bulldozed: 'Kelo,' Eminent Domain, and the American Lust for Land" here.  And we weren't the only ones who liked it.

Now, according to this report, Ms. Main has been sued for defamation by the developer who was the subject of Bulldozed.  Also included in the suit is University of Chicago law professor and eminent domain scholar Richard Epstein, who had the temerity to review the book positively:

The developer of the controversial Freeport Marina project has filed a lawsuit against the author of a book about the city’s use of imminent [sic] domain, The Facts’ parent company Southern Newspapers and a former book reviewer for the Galveston County Daily News.

In court documents filed in Dallas County’s 44th District Court, Walker Royall argues Carla T. Main’s book, “Bulldozed Kelo, Eminent Domain and the American Lust for Land,” contained inaccurate and defamatory statements about him.

Royall also suing is the book’s publisher, Encounter Books, and Richard Epstein of Illinois, who contributed a summary of the book on its dust jacket. In court documents, Royall argues Encounter Books knowingly published libelous material, and Epstein described the developer as being involved in the “machinations of an unholy alliance between city politicians and avaricious developers.

Land Use Law Round-Up

Several interesting land-use law related posts from other law bloggers worth noting:

• The Real Estate and Construction Law Blog posts a detailed summary and analysis of the Save Tara case from the California Supreme Court about development agreements and CEQA that we mentioned here.

• I promised earlier to post a more detailed analysis of the California Court of Appeals case Monks v. City of Rancho Palos Verdes, which held that an indeterminate development moratorium was a taking. The Land Use Law Blog, however, has beaten me to it, as has Law of the Land. Worth reading, both.

• The Williamson County ripeness game never fails to amuse, especially when it involves a governmental defendant attempting to remove a state court regulatory takings claim to federal court based on "arising under" jurisdiction. Property owners are barred from instituting a claim in federal court, but the government can remove a claim on the basis that it could have been filed there in the first place? Strange, but true. Professor Gideon Kanner calls our attention to the latest entry, which has a somewhat rare twist: the judge understood unequal treatment is wrong, and remanded a removed case back to state court. Del-Prairie Stock Farm, Inc. v. County of Walworth, Case No. 07C0932 (572 F. Supp. 2d 1031 (E.D. Wis. 2008). See "The Ripeness Mess Revisited" at Gideon's Trumpet.